Barclays PLC on Monday agreed to pay $2.5 million to settle U.S. claims that the bank processed transactions for government-backed entities in Zimbabwe that were subject to U.S. sanctions.
The U.S. Department of the Treasury’s Office of Foreign Assets Control said in an enforcement release that Barclays, through its units in New York, the UK and Zimbabwe, helped the Industrial Development Corporation of Zimbabwe, a state-sponsored development institution, and individuals linked to IDCZ, process 159 funds transfers valued at around $3.4 million between July 2008 and September 2013.
According to the Treasury, Barclays processed transactions through financial institutions in the U.S., including the company’s New York branch, for corporate customers of Barclays Bank of Zimbabwe, which were majority-owned by people that are on U.S. sanctions lists.
Also, as per OFAC, the apparent sanctions breaches, which represent a non-egregious case, were not voluntarily self disclosed by Barclays. The total base penalty amount for the apparent violations was $5 million.
While Barclays failed to implement sufficient controls to prevent the apparent violations from occurring despite several warning signs that its conduct could lead to a violation of U.S. sanctions laws, Barclays took remedial action in response to the apparent violations and also substantially cooperated with OFAC’s investigation by submitting detailed and organized information. The settlement amount reflects OFAC’s consideration of the following facts.
“This enforcement action highlights the importance for institutions with operations in countries with a significant presence of persons (individuals and entities) on the Specially Designated Nationals and Blocked Persons (SDN) List to take appropriate measures to ensure compliance with U.S. economic sanctions laws when processing transactions on behalf of their customers to, through, or within the U.S.,” Treasury said.
The settlement will encourage Barclays to implement a strong sanctions compliance program across its international operations.
The United States, along with many other Western countries, imposed sanctions on Zimbabwe’s leadership in 2002 following reports of election rigging and human rights abuses. Despite the sanctions, the United States remains one of the major providers of humanitarian aid to Zimbabwe.